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Wednesday, 20 October 21
OVER-RELIANCE ON COAL IN OUR POWER MIX HURTING INDIA - LIVEMINT
In spite of the renewables push, coal still accounts for about 50% of India’s installed power capacity. That means a simultaneous demand and supply shock, as happening now, can disrupt power generation.
The current shortage of coal is raising the spectre of long power outages. At a broader level, the crisis also underscores India’s overwhelming dependence on coal to meet its energy needs, the significant push towards renewables notwithstanding. As of September 2021, thermal power— power generated from burning coal, gas and petroleum—comprised 60% of India’s installed capacity in power generation. Coal alone accounted for nearly 50%. By comparison, renewable sources such as wind and solar energy and biomass accounted for 26%.
European countries lead the way in renewable sources, which are more sustainable and environment-friendly. Germany, for example, drew 44% of its electricity from renewables in the first half of 2021. For India, that figure was just 10% in 2019-20, against the installed capacity share of 26%. While installed capacity represents the maximum amount of electricity that can be generated, the actual amount generated from renewables is lower due to their erratic nature. For instance, lack of sufficient wind on a given day would lead to lower energy produced from wind turbines.
While India is expected to tide over the current coal shortage, the only way it can secure its longer-term energy security is by ramping up production from renewables. However, in the medium term, it is also imperative to upgrade infrastructure at coal mining facilities, and open up existing mines to the private sector for mining to augment the supply of coal. Failure to do so will leave it vulnerable to imbalances in supply—and have deleterious trickle-down effects, as being seen now.
Supply Crunch
Coal production has picked up in the current financial year and exceeds pre-pandemic levels. In the six-month period from April to September 2021, India produced 315 million tonnes of coal, a 5.5% increase over the corresponding period of 2019 (pre-pandemic). However, there has been a secular stagnation in coal production since 2017, with the rise in production not keeping pace with increasing demand.
State-owned Coal India dominates coal production in the country, accounting for about 85% of the coal produced in the first six months of 2021-22. In addition to domestic production, India imports nearly 25% of its coal requirement. Coal imports too had fallen sharply in 2020-21, due to supply shortages and the ensuing increase in global coal prices. In a move that will enhance imports, the Centre has ordered thermal power producers to import coal for at least 10% blending in their fuel, citing a shortage of domestic supply.
Production Woes
There is, currently, a crippling shortage of coal at thermal power plants. At an all-India level, the normative stock of coal required across all power plants is 39.7 million tonnes. However, the coal stock available on 15 October with these plants stood at 7.5 million tonnes, or about 19% of the stock required, according to the Central Electricity Authority. That same day, as many as 104 of the 135 coal-based plants in India had less than five days’ stock of coal remaining, which is deemed to be ‘critical’ for plants that are located near a coal mine.
The shortage is stark across states in all regions. The northern region, which is distant from most coal-producing regions, is the worst-affected, with around 91% of thermal plants facing shortages. By comparison, the western region, which includes mineral-rich Chhattisgarh, is slightly better off, with the coal shortage affecting around 74% of power plants there.
Price Spikes
The current concern regarding coal supplies has led to a spike in electricity costs. The supply arrangement in India is that distribution companies, mostly state-owned, enter into direct purchase agreements with power producers. In the event that producers are unable to fulfil their commitments, or demand exceeds contracted supply, distribution companies buy from sellers in the open market.
Data from the Indian Energy Exchange (IEX), a marketplace for short-term electricity trading in India, shows that electricity prices rose nearly five-fold over the past month in reaction to news regarding the impending shortage of coal. Considering that end prices paid by consumers remained fixed, distribution companies, which are already in a precarious financial position, were forced to bear the brunt of this higher price. Although rates have slid back to normal levels again, this upheaval is a grim reminder of the centrality of coal in India’s power mix and why this needs to change.
Source: Livemint
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Wednesday, 12 May 21
MARKET INSIGHT - INTERMODAL
Tanker S&P is finally back!
For an extended period, Dry bulk & Wet market rates have been diverging, with the SnP deals on each sect ...
Monday, 10 May 21
PAKISTAN: COAL GASIFICATION AND LIQUEFACTION HARMFUL TO ECONOMY - IEEFA
There is no second life for coal
Pakistan’s intention to use coal for power production through gasification and liquefaction technologie ...
Sunday, 09 May 21
HERE'S WHY INVESTORS ARE POURING MONEY INTO COAL, DESPITE ITS BLEAK FUTURE - FORBES
Coal stocks have surged this year – along with the wider energy sector – but experts warn these are likely short-term gains for an indu ...
Sunday, 09 May 21
MAYBANK TO STOP COAL FINANCING - BERNAMA
Malayan Banking Bhd (Maybank) will stop financing new coal activities as part of its sustainable agenda.
Currently, coal financing m ...
Saturday, 08 May 21
LNG-TO-POWER INVESTORS IN THE PHILIPPINES RISK EXPOSURE TO $14 BILLION IN STRANDED ASSETS - IEEFA
High regulatory and financial uncertainty in the Philippines market
The race to develop liquified natural gas (LNG) facilities in th ...
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- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
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- Banpu Public Company Limited - Thailand
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- IEA Clean Coal Centre - UK
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- Sakthi Sugars Limited - India
- Pendopo Energi Batubara - Indonesia
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- Semirara Mining Corp, Philippines
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- Posco Energy - South Korea
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- Australian Coal Association
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- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
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- Kepco SPC Power Corporation, Philippines
- New Zealand Coal & Carbon
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- Siam City Cement - Thailand
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- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- McConnell Dowell - Australia
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- Edison Trading Spa - Italy
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- The University of Queensland
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- Bangladesh Power Developement Board
- Medco Energi Mining Internasional
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- Toyota Tsusho Corporation, Japan
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- Directorate General of MIneral and Coal - Indonesia
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- Eastern Coal Council - USA
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- Mjunction Services Limited - India
- Indonesian Coal Mining Association
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- SN Aboitiz Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- PetroVietnam Power Coal Import and Supply Company
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- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
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- Sical Logistics Limited - India
- Australian Commodity Traders Exchange
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- Star Paper Mills Limited - India
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Singapore Mercantile Exchange
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- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- White Energy Company Limited
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- Ceylon Electricity Board - Sri Lanka
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- Indian Energy Exchange, India
- Bayan Resources Tbk. - Indonesia
- Carbofer General Trading SA - India
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- Samtan Co., Ltd - South Korea
- Mintek Dendrill Indonesia
- Central Java Power - Indonesia
- Orica Mining Services - Indonesia
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- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
- Agrawal Coal Company - India
- GMR Energy Limited - India
- Globalindo Alam Lestari - Indonesia
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- Jaiprakash Power Ventures ltd
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- Central Electricity Authority - India
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- Chamber of Mines of South Africa
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- Sree Jayajothi Cements Limited - India
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
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- Wilmar Investment Holdings
- Attock Cement Pakistan Limited
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- Planning Commission, India
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- Global Business Power Corporation, Philippines
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- Minerals Council of Australia
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- Orica Australia Pty. Ltd.
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Siam City Cement PLC, Thailand
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